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5.Troubled companies

This category contains 210 posts

2 June 2018 (AFR) – Ten years on from the GFC, what happened to the once mighty Babcock & Brown?

(2 June 2018, AFR, p15, by Su-Lin Tan) ‘June 12 2008 is a date seared into the memory of everyone who worked at Babcock & Brown, a financial wizard that operated across the globe, buying up high end assets; wind farms, power companies and a lot of real estate. B&B’s share price, that had soared … Continue reading

31 May 2018 (AFR) – Where technology has hurt property: empty office parks

(31 May 2018, AFR, p44, by Nick Corasaniti) ‘The era of suburban business campuses looks over – Perched off a busy road in northern New Jersey with sweeping vistas of a vast reservoir sits a new relic of the suburban panorama: the international headquarters of Toys “R” Us slogging through its final days after the … Continue reading

24 May 2018 (AFR) – Big Un investors turn dark after ‘life changing’ losses

[COMMENT: This is another very good example of why we should not be committing a large chunk of our investing portfolio to just one stock. No matter how convincing or compelling the story from the company, there is a possibility that something might go wrong.] (24 May 2018, AFR, p52, by Jonathan Shapiro) ‘ “Think … Continue reading

11 May 2018 (AFR) – Godfreys hoists white flag on John Johnston takeover bid, downgrades profit

(11 May 2018, AFR, p27, by Simon Evans) ‘Ailing retailer Godfreys has warned of an alarming 27 per cent tumble in sales in the past two weeks as it revealed a hefty profit downgrade of at least 30 per cent after a disastrous switch in its television advertising approach away from discount sales. The vacuum … Continue reading

27 Apr 2018 (TheAge,SMH) – Myer and DJs falling sales hit retail landlords

(27 April 2018, The Age, Business, p25, by Carolyn Cummins) ‘Department stores are weighing on the results of shopping centre landlords, with sales contributions in the red for the three months ending March 31. Sluggish consumer sentiment, ongoing complaints of bad in-store service and a demise in the concept of a ”one-stop-shop” are putting the … Continue reading

25 Apr 2018 (TheAge) – One move that would go a long way to fixing financial advice

(25 April 2018, The Age, Money supplement, p1, John Collett) ‘There are no quick fixes to curb recurrences of the shocking revelations at the banking royal commission concerning financial advice. But there is a move you’d think would be obvious: licence planners individually.’ <snipped…> ‘… I recall the experience of a 61-year-old cancer patient. She showed me her … Continue reading

24 Apr 2018 (AFR) – iSelect shares dive over 60pc after earnings downgrade, CEO departure

(24 April 2018, AFR, p25, by Yolanda Redrup) ‘Comparison website iSelect is searching for a new chief executive after declaring a huge downgrade to profit guidance due to a slump in activity that shows no sign of improving, even into the company’s busiest time of the year. ‘ Read more at AFR.com (might need AFR … Continue reading

10 Apr 2018 (TheAge) – Half of Myer investors stuck with shares they can’t sell

[COMMENT: Here is a salutary lesson for investors who purchase shares in a company, including supposed blue chip stocks. In the case of Myer, anyone who didn’t spot the declining share price over a long period, or who decided to hold on and prayer for a turn around, if the share parcel value has declined … Continue reading

29 Mar 2018 (AFR) – Property deals jeopardised by Deposit Power deposit guarantee uncertainty

(29 March 2018, AFR, p57, by Duncan Hughes) ‘Thousands of property buyers caught in the collapse of Deposit Power are being warned by liquidators that they cannot be told when or how much of the original value of their deposit guarantee bonds will be paid. That means growing risk that the property deals will be … Continue reading

29 Mar 2018 (AFR) – Project Group collapse just the first of many in overheated market, subbies warn

(29 March 2018, AFR, p57, by Michael Bleby) ‘The collapse of builder Project Group is the first of many to come in the overheated Victorian construction market, according to subcontractors membership group Subbies United. Conditions that triggered Melbourne-based Project Group to go into voluntary administration last week, such as fixed fees and rising costs, were … Continue reading

23 Mar 2018 (AFR) – CBL collapse could leave builders and property owners exposed

(23 March 2018, AFR, p37, by Duncan Hughes) ‘Builders and apartment owners could face massive bills to replace dangerous external cladding following the collapse of giant New Zealand-based insurer CBL, according to lawyers and insurers. Aggrieved property buyers wanting compensation for poor workmanship, substandard materials, or non-completion because of the financial collapse of a builder could … Continue reading

9 Mar 2018 (AFR) – Myer losing relevance with shoppers and investors – set to fall from benchmark ASX index

[COMMENT: Note that some other news agencies and commentators have declared that Myer ‘has been dumped’ from the index. To be a little pedantic, Myer is still in the index until the start of trading on Monday 19 March. Until then it is possible that more fund managers will continue to sell it in order … Continue reading

20 Feb 2018 (AFR) – ASX defends tech stock supervision amid GetSwift, Big Un, Buddy Platform controversy

(20 February 2018, AFR, p23, by Michael Bailey) ‘The Australian Securities Exchange has denied it faces a disclosure crisis in its swelling ranks of small cap technology listings, with its listings chief describing recent rule-skirting behaviour from the likes of GetSwift and Big Un as “outlying”. ‘ Read more at AFR.com (might need AFR login … Continue reading

20 Feb 2018 (AFR) – Big Un revelations as ASX market darling goes into trading halt

[COMMENT: This revealing news story is an eye opened about how some companies finance their operations. Investors beware.] (20 February 2018, AFR, p16, by Jonathan Shapiro) ‘Big Review TV, a subsidiary of ASX listed Big Un Limited, granted security over its assets to FC Capital, the small business lender that is advancing funding to facilitate the … Continue reading

20 Feb 2018 (AFR) – GetSwift plummets 55pc on reinstatement to ASX

(20 February 2018, AFR, p1, p13, by Michael Bailey) ‘GetSwift shares plummeted 55 per cent on Monday after the logistics software maker told the market that less than half its announced contracts had progressed to a revenue generating stage. After last trading at $2.92, before their suspension on January 22, GetSwift’s shares closed on Monday … Continue reading

10 Feb 2018 (AFR) – China’s HNA in $US4 Billion sell-off

(10 February 2018, AFR, p12, by Sarah Mulholland) ‘The troubled Chinese conglomerate HNA Group  is selling a raft of buildings across the US as the once-voracious acquirer looks to cut its massive debt. Among the properties on the block is 245 Park Avenue in New York, according to a marketing document seen by Bloomberg. HNA bought … Continue reading

6 Feb 2018 (TheAge) – Bill Lewski pays zero to walk away from $190m suit, investors get zip

[COMMENT: This news story provides an interesting insight into what can go wrong with investments, and the extent to which the investors’ funds might be at risk.] (6 February 2018, The Age, p11, Sarah Danckert) ‘Controversially forgetful businessman Bill Lewski has paid nothing to walk away from $190 million in civil claims brought against him, … Continue reading

3 Feb 2018 (AFR) – Seeds of doubt in Quintis forestry trail

[COMMENT: An interesting insight into some of the things that might go wrong for investors.] (3 February 2018, AFR, p27, by Vesna Poljak) ‘Missteps bedevilled the timber project developer. “The long and short of it is that forestry assets take time to mature, which requires capital, which, in turn, requires trust. With trust gone, the … Continue reading

2 Feb 2018 (AFR) – Xerox, an innovator hit by digital revolution, cedes control to Fujifilm

[COMMENT: Over the years, as technology develops, some major companies fail to keep up with technology and come across tough times. This happened to Kodak in recent years – a company well known to many people around the world, but not perhaps amongst the younger generations. Now it is Xerox’s turn. This can be a … Continue reading

25 Jan 2018 (AFR) – Quintis: Inside the year that broke the sandalwood grower

(25 January 2018, AFR, p37, by Vesna Poljak) ‘In March 2017, a celebrity crowd toasted the rebranding of sandalwood grower Quintis at the Glasshouse in Melbourne’s sporting precinct. AFL boss Gillon McLachlan attended with cricketers Ricky Ponting and Adam Gilchrist, a former director of the company back when it was known as TFS.’ <snipped…> ‘This … Continue reading

23 Jan 2018 (AFR) – US hedge fund Glaucus blasts tax breaks for MIS after Quintis joins failures

(23 January 2018, AFR, p13, by Vesna Poljak) ‘The hedge fund that brought down listed sandalwood grower Quintis has urged Australian policymakers to rethink tax incentives for managed investment scheme investors after the former TFS Corp became the latest failure in a long line of forestry-linked collapses. Quintis appointed administrators on Saturday, ending a months-long … Continue reading

22 Jan 2018 (TheAge) – Sandalwood company Quintis collapses into administration

(22 January 2018, The Age, Business, p23, Cara Walters) ‘Sandalwood company Quintis has collapsed with Korda Mentha appointed as administrators. Quintis is listed on the Australian Securities Exchange and owns and manages more than 12,000 hectares of Indian sandalwood plantations across northern Australia.’ Read more at TheAge.com.au

17 Jan 2018 (AFR) – Behind the collapse of UK construction giant Carillion

(17 January 2018, AFR, p31, by Kimiko de Freytas-Tamura) ‘The British government scrambled Monday to contain the damage as the country’s second-largest construction firm was forced into liquidation after losing money on a series of contracts and racking up around $US1.35 billion ($1.75 billion) in debt. The bankruptcy of the firm, Carillion, one of the … Continue reading

17 Jan 2018 (AFR) – Carillion’s collapse puts spotlight on Britain’s unfunded pensions

(17 January 2018, AFR, p10, by Lukanyo Mnyanda) ‘The collapse of Carillion Plc with more than half a billion pounds of unfunded pension commitments may increase pressure on some of the nation’s biggest companies to plug their own funding gaps. The construction giant employs almost 20,000 people in Britain and has a pensions shortfall of … Continue reading

17 Jan 2018 (TheAge) – ‘This is a very sad day’: UK government seeks to limit damage after Carillion collapses

(17 January 2018, The Age, Business, p24, Kate Holton) ‘London: Britain’s Carillion collapsed on Monday after its banks lost faith in the construction and services company, forcing the government to step in to guarantee major public works contracts. In one of the biggest British corporate failures in recent years, Carillion went into compulsory liquidation after … Continue reading

16 Jan 2018 (AFR) – ‘Hundreds of firms at risk’ if construction giant Carillion fails survival

(16 January 2018, AFR, p32, by Iain Withers) ‘Crisis-hit construction firm Carillion’s future remained in the balance last night as the Government held last ditch talks on whether to bail-out some of its most troubled contracts. Accountancy firm EY was waiting in the wings to potentially put the 5.2 billion pound ($9 billion) revenue contracting … Continue reading

10 Jan 2018 (TheAge) – RFG shares slump as it warns on profit for second time in three weeks

[COMMENT: Here is another case study example to indicate that astute short term investors and traders would have protected their capital by selling the stock before the shock profit warnings. It is not possible to tell whether this stock will recover, or continue into oblivion and perhaps be snapped up by hedge funds or the … Continue reading

2 Jan 2018 (AFR) – Tough Christmas could help Oroton in rent fight

(2 January 2018, AFR, p13, by James Thomson) ‘Poor Christmas sales for Australia’s retailers could actually help Oroton’s new owners, led by fund manager Will Vicars, as they prepare for a fight with some of Australia’s biggest landlords. Mr Vicars, the chief investment officer at Caledonia, signed a deal with Oroton’s administrators on December 23 … Continue reading

21 Dec 2017 (AFR) – Steinhoff scandal expected to trigger asset sales in Australia

(21 December 2017, AFR, p13, by Sue Mitchell) ‘Steinhoff International’s $1 billion Australian business could be split up and sold off if banks owed €10.7 billion ($16 billion) ignore the company’s pleas for support and pull the plug. Industry players believe Steinhoff’s Australian furniture businesses Freedom, Fantastic Furniture and Snooze, and department store chains Harris … Continue reading

20 Dec 2017 (TheAge) – Retail Food Group shares plunge 25% on profit downgrade

(20 December 2017, The Age, Business, p23, Patrick Hatch) ‘Retail Food Group’s shares have gone into freefall after the cafe and bakery giant issued a profit downgrade and admitted franchisees were leaving its network. RFG’s shares plunged 25 per cent to $1.98 on Tuesday, after the company said it expected its first-half statutory net profit … Continue reading

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